Asked by: Daniel Kawczynski (Conservative - Shrewsbury and Atcham)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment his Department has made of the potential merits of allowing women affected by the increase in state pension age to retire early on a reduced pension; and if he will make a statement.
Answered by Lord Harrington of Watford
Many alternative options to the existing arrangements have been put forward. All of these options, including the actuarially reduced pension, suffer from substantial practical problems and would create extra cost to the taxpayer.
Even if actuarially neutral, such an option would result in losses of income tax and National Insurance payments. To give some idea of the scale of this, for individuals affected by the Pensions Act 2011, additional income tax and NI receipts from the change to State Pension age were estimated to be up to £8.3 billion.
Furthermore, the new State Pension’s key features are simplicity—giving people the clarity and confidence to save—and a value set above the minimum income guarantee standard. An actuarially reduced pension would undermine both these key features. It would complicate outcomes and, if people’s actuarially reduced state pension were below the minimum guarantee, might increase the need for means-tested support amongst pensioners.
There are also legal risks associated with offering affected women an actuarially reduced pension. The requirement to take account of equality between men and women in framing new legislation means any new transitional provisions aimed just at those women affected by recent rises to the State Pension age run the risk of legal challenge.
This matter has been comprehensively debated in Parliament and the Government has been very clear that there will be no further changes to the current arrangements or any financial redress in lieu of pensions.
Asked by: Daniel Kawczynski (Conservative - Shrewsbury and Atcham)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what notification was given to women affected by the Pensions Act 1995.
Answered by Justin Tomlinson - Minister of State (Department for Energy Security and Net Zero)
Following the Pensions Act 1995, State Pension estimates, issued to individuals on request, made the changes clear. The DWP’s State Pension estimates have been providing individuals with their most up-to-date date of reaching State Pension age since 1995. Over that period, we have encouraged anyone seeking to plan for their retirement to get a pension statement. Since April 2000, the Department has issued more than 11.5 million personalised State Pension statements to people who requested them. We continue to encourage people to request one, as part of our on-going communications.
DWP also ran a pensions education campaign in 2004, which included informing people of the future equalisation of SPA. The campaign included:
In addition to these efforts, all those affected by the 1995 Act changes were sent letters between April 2009 and March 2011 using the address details held by HMRC at that time.
Asked by: Daniel Kawczynski (Conservative - Shrewsbury and Atcham)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment he has made of the effect on the financial situation of women of their not being notified about changes introduced by the Pensions Act 1995.
Answered by Justin Tomlinson - Minister of State (Department for Energy Security and Net Zero)
The 1995 Act started the process of equalising the state pension age of women by phasing in the rise of the retirement age from 60 to 65 between 2010 and 2020. Changes were communicated by means of State Pension estimates issued to individuals on request since 1995, as well as through a DWP pensions education campaign in 2004. Since April 2000 more than 11.5 million personalised statements have been issued. A 2004 DWP report, Public Awareness of State Pension Age Equalisation, reported its survey findings that 73% of those aged 45 to 54 at the time were aware of the changes to women’s State Pension age.
Following the Pensions Act 2011 the Government wrote to all those directly affected to inform them of the changes to their State Pension age. Research published in 2007 by the DWP showed that, in 2006, 86 per cent of women aged 55-64 and 90 per cent aged 45-54 were aware that the State Pension age would increase in future.
A number of changes to the State Pension with impacts on state pension outcomes have been implemented since the introduction of the Pensions Act 1995. The Pensions Act 2007 introduced beneficial changes to the entitlement conditions for State Pension, which were estimated to result in 75 per cent of women reaching State Pension age in 2010 being entitled to a full basic State Pension compared to only 30 per cent in 2007.
The Pensions Act 2014 introduces the new State Pension from April 2016, available to women born on or after 6 April 1953. Around 650,000 women reaching State Pension age in the first ten years will receive an average of £8 per week (in 2014/15 earnings terms) more due to the new State Pension valuation of their National Insurance record. By 2030, over 3 million women will stand to benefit by an average of £11 per week.
Independent analysis by the Institute for Fiscal Studies has shown that the rise in women’s State Pension age since 2010 has been accompanied by increases in employment rates for the women affected. For those who are unemployed, or unable to work, working age benefits are still available.
Asked by: Daniel Kawczynski (Conservative - Shrewsbury and Atcham)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what estimate he has made of the cost to the public purse of extending the higher rate of disability living allowance, including the Motability rate, to children under the age of three.
Answered by Mark Harper - Secretary of State for Transport
No such estimate has been made.